IRS offers tax relief to leave-based donation programs for Hurricane Harvey victims

The Internal Revenue Service said Tuesday it is giving special relief to support leave-based donation programs as a way of assisting victims of Hurricane Harvey.

The programs are similar to ones offered by the IRS in the aftermath of Hurricane Katrina in 2005, Hurricane Sandy in 2012, the Ebola outbreak in West Africa in 2014, and Hurricane Matthew and severe flooding in Louisiana in 2016.

Under such programs, employees are able to forgo their vacation, sick or personal leave in exchange for cash payments their employer makes, before Jan. 1, 2019, to charitable organizations providing relief for the victims of this disaster.

Under the IRS’s treatment of the special relief, the donated leave won’t count toward the income or wages of employees, while employers will be allowed to deduct the cash payments as business expenses.

Notice 2017-48, posted Tuesday on IRS.gov, provides details on the relief. The document offers guidance for income and employment tax purposes on the treatment of cash payments made by employers under leave-based donation programs for the relief of victims of Hurricane Harvey and Tropical Storm Harvey.

Buildings at a ranch stand immersed in floodwaters from Hurricane Harvey in this aerial photograph taken above West Columbia, Texas.
Buildings at a ranch stand immersed in floodwaters from Hurricane Harvey in this aerial photograph taken above West Columbia, Texas, U.S., on Wednesday, Aug. 30, 2017. Unprecedented flooding from the Category 4 storm that slammed into the state's coast last week, sending gasoline prices surging as oil refineries shut, may also set a record for rainfall in the contiguous U.S., the weather service said Tuesday. Photographer: Luke Sharrett/Bloomberg

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